Illinois Debt Collection Laws

A debt occurs when one person owes a financial sum—usually a substantial amount—to another party. In such a relationship, the person who is the money is called the debtor, and the person who is due the money is called the creditor. If the bills from the creditor to the debtor go unheeded for a long period, it is customary for the creditor to turn the account over to a debt collection agency. Even though the debtor is required to own up to his/her financial obligations, he/she is nonetheless protected by the federal Fair Debt Collection Practices Act (FDCPA). In Illinois, there are two statutes that also protect debtors: the Illinois Collection Agency Act, and the Illinois Consumer Fraud and Deceptive Practices Act. These statewide acts differ little in substance from the federal act.

Debt Collection in Illinois

In the state of Illinois, debtors have numerous forms of legal recourse in dealing with harassing or aggressive collection agencies. Not only do collection agencies have to take certain actions when collecting a debt, but also, there are numerous collections practices and tactics, which a debt collection company cannot use. Laws in the state of Illinois not only mirror those established by the federal government, but also, the state further augments these laws in favor of consumers as well.

Illinois Statute of Limitations

The state of Illinois, through consumer protection statutes, has enacted several statutes of limitations regarding legally enforceable actions concerning outstanding debt obligations. Several forms of debts are covered by these statutes of limitations, which will vary depending on the nature of the debt and the actions a debtor has taken to rectify this debt. At the end of a statute of limitations period, if proven applicable, a creditor no longer has a legally enforceable right to collect court awards or liens regarding a consumer's past debt obligation. Some of the applicable Illinois debt collection statutes of limitations include:

  • Insufficient fund notices regarding checks have a statute of limitations of no more than three (3) years following the dishonour of a given draft
  • Foreign judgment statutes of limitations are applicable to the laws of that foreign location, and domestic judgments are enforceable for a period of twenty (20) years with another period of renewal for twenty (20) years
  • Breached contracts for sale have a statute of limitations period of no more than four (4) years
  • A five (5) year statute of limitations period is applicable to all open or unwritten accounts in the state of Illinois, unless contract for account is written, then period of ten (10) years is applicable

Collections Practices and Rules for Illinois

Given that debt collection has long been rife with fraud, the federal government passed the Fair Debt Collection Practices Act (FDCPA) several years ago. While many states have their own debt protection statutes, others like Illinois generally adhere to the principles spelled out in FDCPA. These federal laws, coupled with state consumer protection statutes, are in place to ensure the legal and reasonable collection of debts by debt collection companies.

Legal Collections Actions

  • If you receive a phone call, fax, or email from a debt collection agency, debt collectors are legally obligated to follow that initial contact up with a letter within five days.
  • Letter of debt notification should specify the amount of money owed, and to whom.
  • In addition, the agency may not contact you at odd hours (like the federal statutes, Illinois specifies that calls before 8:00 am and after 9:00 pm are not allowed).
  • In addition, debt collectors may not call during work hours if debt collectors know that your employer forbids personal calls.
  • However, the collection agent may not call you again if you send them a written notification that you do not owe any money.

Illegal Collections Actions

  • Debt collectors may contact you by phone, fax, email, or mail, provided they do not call before 8:00 am and after 9:00 pm, unless the debt has agreed to calls after or before these regular hours
  • Debt collection companies may not call you during working hours if they know your employer forbids personal calls
  • Debt collection agents may not use profane language, threaten legal action without intent to pursue such actions, or otherwise attempt to intimidate or harass a debtor
  • Debt collection companies must prove the legitimacy of a given debt collection claim through several forms of verification, the first of which includes a mandatory document including the debt owed, the amount owed, and other information about a debt company after the initial contact with a debtor

Laws for Debt Harassment in Illinois

If money is owed, it is advisable to document all of the information: the time and date the person called you, their name and company, and the amount they say you owe. Documenting everything is a good way to protect against fraud. Assuming that their records are in agreement with yours, you may wish to set up a payment plan. It should be one that you can afford over an extended period. If you owe several debts, Illinois law says that you may select which debts to pay off first. In such a case, they may not harass you, or ascribe your payments to debts that you have not specified.

Illinois Debt Negotiation and Settlement Rules

If a consumer disputes the veracity of a collections claim, a certified letter must be sent specifying why that is the case. The debt collection agency then has thirty (30) days to respond. Should a debtor actually owe a debt, the collection company must send a copy of the bill, which states the amount owed, and the original creditor's documents.

Assuming that you owe the money, you may go about setting up a payment plan. Should you choose to do this, be sure to document everything, including the manner of contact from the agent, their name, and if applicable, any manner in which they may have attempted to harass or intimidate you. Even if the charges against you are valid, it is beneficial to hire an attorney for several reasons:

  • Debt collection rules and regulations are stringent, and can be difficult to understand;
  • Despite regulations, there is much potential for fraud;
  • The debt collection agent must not contact you; they must speak directly to your attorney.

For these reasons, hiring a lawyer will provide you with much-needed legal counsel, and can help you to get out of debt.

Help from an Illinois Debt Collection Attorney

Debt collection can be stressful, especially if there is fraud involved, or if the collection agent is harassing you. In such cases, you should definitely consider hiring a lawyer. This has several advantages. A lawyer can:

  • Prevent a collection agency from harassing you;
  • Negotiate a payment plan for you;
  • Speak to the agent on your behalf;
  • Provide piece of mind.

Even if there was no harassment, an attorney can also provide sound legal advice on how to pay your debts off, avoid fraud, and ensure future financial stability.

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